What factors do you think are most important in selecting a sourcing solution?
Choosing a sourcing solution can be an overwhelming task especially if your company currently relies on offline tools or an in-house system currently.
Let me start by offering some perspective on the market based on my experience:
- Many fine solutions are available.
- Don’t believe everything marketing says or writes.
- No solution is right for all organizations.
- The solution providers know their strengths and weaknesses and should be willing to tell you when they are not the right fit for you.
- You can find a solution for any budget but that may not deliver the best ROI.
- Do you expect to deliver a million in savings for $10,000? You might get lucky but if you were in the seller’s shoes would you offer that big an ROI? Not likely. Like most things in life you get what you pay for.
- Establish a budget before you begin your search and realize you will need to adjust it up or down.
- Talk about the budget early. Neither side wants to get excited and then find that there is no way to make this work financially.
- You may not appreciate all the benefits of certain features the solution offers up front.
- You and the provider must be fully invested in your success.
- The timing is never right. The best time to plant a tree was 20 years ago, the next best time is today.
- When you make your choice, be ready to put it to the test. If you don’t, you may end up with “shelfware”.
- Focus on the events you have in front of you now, not the ones a year from now. This is a marathon and it is run one step at a time.
- Don’t start with the riskiest event. Cut your teeth on something less critical. There is a learning curve for everything.
- The more you use a tool, the easier it should become. If this doesn’t happen you probably made the wrong choice.
- This is a leap of faith even if you are 100% convinced that you have made the right choice.
- It only matters what you want to buy, NOT what the provider has to sell.
There are many other thoughts that I can offer but the ones I have shared are based on discussions with many fine organizations in the past few years.
Once you have done your research, how will you pick if the choice is not obvious?
Based on all my business experience, I believe that industry experience and customer satisfaction are the two most important factors.
I am sure you can think of other key factors like financial stability and years in business for example.
I like industry experience even if the goods and services are not identical. An example of this could be commercial and residential construction. There both source from many related categories.
I believe industry experience is significant even you are sourcing common goods and services.
Understanding how you make money in your industry is vital. Your consultant must know what your role is in supporting the supply chain in your organization.
After industry experience customer satisfaction is the most important factor in my opinion.
I do believe in references. I also realize that everyone is not an expert in asking a reference provider the right questions. However, if a reference is hesitant or reluctant to respond to questions like “would you hire them again given the choice?” that should be a red flag.
I also believe in the work of independent consultants that evaluate solution providers.
It can be quite enlightening to learn the number and type of questions they ask to establish customer satisfaction. I know I have never personally conducted the type of rigorous customer satisfaction review they do. Their reputation is on the line and that is reflected in their efforts.
I encourage you to reach out to someone in this field to learn what they ask and how they determine their rankings. It is enlightening.
One other thought to consider. If your provider has an abundance of people on staff who have held responsible positions in procurement, that experience will be very valuable for you.
Ask better questions, make changes and 2018 will be your best year ever.
Action Step: If you are uncertain where to start the process of change, a procurement professional like myself can provide guidance and expertise to help your organization achieve the results you want.
If you want to go explore this topic in greater detail, please contact me. I invite you to request 30-minute discovery conversation. In my experience the next step will be apparent at the end of the call. I never assume that what I have to offer will be right for everyone, so don’t expect a sales pitch. You can reach me at (973) 718-7071 x875. The call will be forwarded to my mobile phone if I am not in my office which is pretty likely.
If you would like to know more ways to reduce costs without changing the way you do business, simply give me a call or send me an email with your contact information and the best time to reach you.
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Until Next Time, I Wish You Great Success in Your Business and in Your Life